Better by Design

Features - Consumer Packaging

Since the 1990s, an increasing number of countries have implemented extended producer responsibility (EPR) programs to shift the cost of collecting and recycling packaging onto the manufacturers who put it on the market. While originating in Western Europe, today more than 50 jurisdictions around the globe have EPR programs for packaging, including countries throughout Europe and parts of Asia, South America and Canada.

The Basis for Fees
Brand owners, private-label retailers and importers with packaging materials that end up in the waste stream must pay fees to one or more recovery organizations to cover the cost of the collection, transportation, sorting and recycling of the packaging sold within the jurisdictions that have implemented EPR programs. The fees are based on the amount and type of packaging materials and are reviewed annually by the recovery organizations to ensure they take into account their program costs and the present value of the material collected.

As originally established, the programs included fees for only a few broad categories of materials, such as glass, plastic, aluminum, steel, paper and wood. While relatively limited material categories remain in some jurisdictions, most recovery organizations increasingly have expanded the number of material types and some now have as many as 30. The reason? To better recover costs for harder-to-manage materials and to have a greater impact on the design process by making companies more accountable for their packaging.

More Categories, More Penalties
Under the initial EPR program designs, it didn’t matter whether a company produced plastic packaging from PET (polyethylene terephthalate) or PVC (polyvinyl chloride)—the rate was the same. Because brand owners include the EPR fees they pay in the product price, obligated companies were not incentivized to consider packaging fees as part of the design process because there was no direct impact on the cost of goods, as all materials were assigned the same rate. But now the recovery organizations have years—if not decades—of historical data to draw from. With a better understanding that some materials are much more difficult—and costly—for them to manage, the recovery organizations are transferring that burden to the brand owners by assessing higher rates for those categories.

Plastics. While EPR programs previously treated plastics as a single category despite the material composition, color or type (e.g. flexible film or rigid), that approach is changing to address the impact of these various materials on the recovery organization’s standardized streams.

The trend across countries is that easy-to-recycle, high-value materials such as rigid PET have emerged as a low-cost leader, while more difficult, less valuable plastics incur higher fees. In Denmark, for example, where packaging fees—some of the highest in the world—are a government tax, rates for PVC and EPS (expanded polystyrene) are 40 percent higher than other plastics. Plus, there’s a significant price advantage for using recycled content material. For a company putting a plastic clamshell on the market in that country, the difference in packaging fees is significant.

The chart below illustrates the differences in fees for a 25-gram plastic clamshell container.

Similarly, for plastic bottles, rates favor those the recovery organizations can better handle. For example:

Belgium’s recovery organization, Fost Plus, which has multiple categories for plastics—PET bottles (colorless, blue and green only), HPDE (high-density polyethylene) bottles and other plastics—charges less for the former two. In fact, the organization lowered its rates for 2013 by 21 percent for these easy-to-recycle, high-value materials.

In the Canadian province of Ontario, of all the plastic material types, Stewardship Ontario charges the least for HDPE bottles and jugs and PET bottles, with rates for 2013 of $0.1352 per kilogram and $0.147 per kilogram, respectively.

For bottle design, these fees leave an obvious winner: clear or blue PET. The fee differences for a 25-gram plastic PET bottle are illustrated below:

Glass. Color choice affects EPR packaging fees in glass as well. Since the value of recycled glass is diminishing, in general, fees for glass are rising, especially compared with other materials (e.g., fees for PET bottles are going down). But there are still better design choices. In Ontario, Stewardship Ontario charges much lower fees for clear glass ($0.0284 per kilogram) compared with its fees for colored glass ($0.0484 per kilogram). Likewise, in Japan, obligated companies are charged three times more for colored glass compared with fees for clear and amber glass.

For a 250-gram (8.75-ounce) glass bottle, the cost variance between clear and color adds up:

Paper. Paper also has witnessed a change in fee treatment as the number of categories has expanded, including newer classifications such as beverage cartons (with different fees for aseptic containers). There’s also a growing trend to more strictly determine the difference between paper and paper laminate to ensure proper categorization—and higher fees—for the latter.

For example, this year France increased the threshold of paper content required for packaging to be categorized as “paper” from 50 percent to greater than 80 percent. In Belgium, packaging must have more than 85 percent paper content to be considered paper. In Ontario, for paper to be charged paper fees ($0.0839 per kilogram) and not laminate rates ($0.1822 per kilogram), it has to be made from at least 95 percent paper by weight. But the rule doesn’t apply universally: To help address some difficult-to-recover and reuse packaging, Stewardship Ontario began categorizing coffee cups, which are very hard to recycle, as laminates, despite their high paper content.

The table below provides the cost benefits of paper compared with paper laminate for a 150-gram (5.25-ounce) paper carton.

Disrupters Face More Fees
In an effort to prevent companies from using materials that contaminate the recycling stream, some countries are taking the idea of corporate responsibility a step further by penalizing these companies for their choices.

In France, for instance, a disruptor fee of an additional 50 percent on top of the EPR packaging fee is imposed on a variety of packaging types:

Liquid food packaging made from a majority of paper/cardboard, but comprising less than 50 percent fiber; and

Packaging paper and cardboard reinforced with polyester (this type of kraft paper has a grid of polyester in it to increase its strength and is used for transport packaging that needs to be watertight).

France also imposes an additional 100 percent penalty for nonrecoverable packaging marked as recyclable but for which no recycling system exists.

Belgium’s Fost Plus has a category for materials that do not meet the recoverable European Committee for Standardization (CEN) standard (not recyclable or energy recoverable). Fees are at least 40 percent higher for these materials, including:

Other composites when the dominant material is glass;

Composites containing less than 50 percent aluminum or steel; and

Any use of porcelain or ceramic in packaging.

In Ontario brand owners must now report their disruptor plastics, such as biodegradable film and rigid plastic. As of yet, companies do not have to pay higher fees for these materials; but, whether they will be required to do so in the future remains to be seen.

Materials are the Bottom Line
With the recovery organizations’ creation of additional categories to capture and charge more for—i.e. materials that are difficult to manage—while lowering rates for packaging that’s easier to handle, certain materials now have a clear price advantage. The recovery organizations’ hope is that these variations in fees send a loud, clear message to companies to make better design choices and to select materials that have less of an impact on the environment by hitting them where it hurts most: the bottom line.

Victor Bell is president of Environmental Packaging International (EPI), a global environmental packaging and product stewardship consultancy based in Jamestown, R.I. More information is available online at www.enviro-pac.com or by calling 401-423-2225.

Smaller Portions

Features - Ferrous

Even in parts of the country where blizzards and ice storms are few and far between, most scrap recyclers describe the winter of 2012-2013 as having been a tough one.

Buyers and yard managers looking back at the winter are almost in unison saying they are glad it is over and they hope spring brings with it more scale traffic and industrial generation.

A prevailing sentiment, as well, is that the considerable amount of shredding and processing capacity that was put in place in the first seven or eight years of the new millennium has brought about fierce competition that continues to squeeze margins and diminish operating schedules.

A Better Era
For many buyers of ferrous scrap, 2008 remains a critical dividing line between a market when scrap was flowing in to feed shredders and shears to the low-volume market of today.

By that yardstick, there is little question that flows so far in 2013 remain disappointing compared with generation during the years from 2001 to 2007, when construction, demolition and automotive production were booming and scrap generation was healthy.

“Since the fall of 2008, our average daily buy is off more than 50 percent,” says one ferrous scrap buyer in the Southeast.

Post-2008, the subsequent down cycle was initially severe and also has been long-lasting, causing both short-term and long-term pain for the ferrous scrap sector.

Experienced scrap recyclers are all too familiar with managing through a sharp down cycle and many also have been through extended troughs in the business cycle.

A difficult part of managing through the past few years, many of these recyclers say, has been the existence of a much more crowded scrap recycling sector, exemplified in one key way by the considerable number of auto shredders installed in the past several years.

Going by Recycling Today’s count of auto shredders in the United States, the number of shredders in operation soared from 191 in 2004 to 290 by 2011.

Long-time owners of shredding plants were not overjoyed to have the additional competition even in 2006 or 2007, when flows were healthy. During the five-year stretch from 2008 to 2013, these same operators say they are experiencing reduced flows, shorter operating hours, compressed margins and a struggle to maintain profitability.

Many of the owners of these newer shredders offer a different perspective. From their point of view, owning a shredder has allowed them to get through tough times and increase scrap flows by competing to process auto bodies, white goods and other types of scrap. As well, it may have allowed them to offer a shredded ferrous scrap product that is in far greater demand from both domestic still mills and export brokers compared with baled scrap.

Depending on the size and price of the shredders they purchased, some shredder operators say they have achieved the return on investment they wanted—even in an economic down cycle.

However, their ability to compete in these new ways has almost certainly been in direct conflict with the ability of owners of larger, established auto shredding plants to maintain adequate flows to feed their plants in the past five years.

No Great Shakes
Heading out of what was almost universally considered to be a gloomy winter, a ferrous scrap buyer in the eastern U.S. says in early April that “hope springs eternal” for flows to increase in the spring and summer.

That sentiment is expressed by several recyclers, especially in regions where construction and demolition activity hibernates in the winter, but economic indicators and forecasts are not necessarily pointing to that scenario.

Even before actions stemming from the sequester-related federal budget cuts took effect, economic and construction industry forecasters anticipated slow growth in the construction sector at best.

However, positive signs that the long depressed residential construction sector may finally be on the rebound remains. “Housing starts should reach nearly 950,000 units, with single-family construction near 700,000 starts during 2013,” says Ed Sullivan, chief economist of the Portland Cement Association, Skokie, Ill. “We see starts hitting the 1 million mark in 2014 or 2015,” he adds.

If this rebound in the residential sector includes a demand for urban living among young people and apartment dwellers in general, it could bode well for the demolition sector. (See the Demolition Industry Report “Back and Forth,” starting on page 70 of this issue, for more information on the construction and demolition sectors.)

Ferrous scrap buyers seem to be keeping their expectations modest in terms of spring and summer 2013 generation levels, with one national accounts manager saying his customer base includes a blend of manufacturers, some of whom are generating a little more scrap than last year, but many others whose generation is flat or even declining relative to 2012.

The automotive sector has rebounded more convincingly from the recession of 2008 and 2009. Car dealers in the United States continue to work their way back from selling just 10.4 million cars and light trucks in 2009, a figure significantly lower than the 15 million to 17 million units that were sold most of the previous years.

According to an early April report on Market Watch, www.MarketWatch.com, “Car-shopping website Edmunds.com has raised its full-year U.S. car sales forecast to 15.5 million vehicles, a level the industry hasn’t seen since 2007, as car shoppers remain resilient in the face of fiscal issues in the U.S. and uncertainty in Europe.”

As noted in the April Ferrous department of Recycling Today, another automotive industry analyst sees the upward trend continuing through 2016. Mike Wall of IHS Global Solutions, Englewood, Colo., said in a speech in March that new passenger vehicle sales were continuing to climb steadily, heading toward 17.5 million units in 2016.

The related increases in scrap generation and steel output resulting from a potential 68 percent increase in automotive production over seven years will not be felt the same in all regions of the country, according to Wall.

Whereas in 2000, 25 percent of North America’s vehicles were made south of Ohio, by 2016 that figure will have climbed to 50 percent. Thus, scrap recyclers serving auto plants in the Great Lakes region may not experience the same increase in stamping plant scrap as recyclers near the newer southern assembly plants.

Markets Near and Far
Ferrous scrap pricing has fluctuated in early 2013, with tight supply being met by demand that ebbs and flows both domestically and on the export side.

Steel Pathways

Electric arc furnace steelmaker Steel Dynamics Inc. (SDI), Fort Wayne, Ind., has appointed John Nolan to the new corporate level position of vice president – product development. The former vice president and general manager of SDI’s Structural and Rail Division will be responsible for the identification, development and innovation of new products for the automotive, construction and rail markets.

In his new position, Nolan reports to Dick Teets, SDI executive vice president for steelmaking.

“One of the goals for our steel operations is to grow our product lines across all segments of our business, both by innovation to meet our customers’ growing end-use applications today and by anticipating and meeting what their needs will be tomorrow,” Teets says.

“John’s unique background in both integrated and electric furnace steelmaking, as well as his knowledge and experience at both the marketing and operations ends of the business across all of our product lines, makes him the logical choice to fill this important position,” he adds.

Also commenting on the appointment, Mark Millett, SDI president and CEO, says, “John has been a key contributor to the success of Steel Dynamics and looks forward to the new challenge. I am sure he will help bring new ideas and perspectives in our efforts to broaden our product offerings and create further value for our customers.”

In the United States, flat-rolled mills serving the automotive industry have rebounded along with that sector, while mills making rebar and structural steel generally continue to operate at lower capacity rates.

The overall statistical portrait provided by the American Iron and Steel Institute (AISI), Washington, D.C., includes a 75.7 percent steel mill capability utilization (capacity) rate year-to-date through the first three months of 2013. Unfortunately, production overall in 2013 has not been increasing over 2012 levels.

“Adjusted year-to-date production through March 30, 2013, was 23.58 million tons, at a capability utilization rate of 75.7 percent,” notes the AISI. “That is a 7.7 percent decrease from the 25.55 million tons during the same period last year, when the capability utilization rate was 79.3 percent, the association adds.

As with other secondary commodities, export markets have helped provide additional demand for ferrous scrap even when the U.S. economy was at its lowest point.

Turkey, whose steel mills provide the beams and shapes that form the spine of a major building boom in the Persian Gulf region, is the largest single import market for ferrous scrap leaving other nations.

Serhat Babac of Turkey-based information company SteelOrbis, speaking to attendees at the Middle East Metals Recycling Conference in Dubai in early March of this year, said mills in Turkey likely will continue to need scrap from North America in 2013.

In part, scrap sent from North America is making up for the diminishing amounts leaving the former Soviet Union (where scrap exports are tightly controlled) and the European Union, whose economy is generating scrap at even lower levels than North America’s.

Babac reported that as likely, especially since SteelOrbis foresees that the Black Sea region “will decline even more” as a scrap source, owing to a combination of a depleted scrap reservoir and export tariffs that will tighten supplies from Russia and its neighbors.

Globally, steel output is up slightly in the first two months of 2013 compared with one year ago, though an imbalance exists between China and most of the rest of the world.

While China produced 12 million more metric tons of steel in the first two months of 2013 compared with the same period in 2012, production in the rest of the world actually decreased.

According to figures compiled and reported by the Brussels-based World Steel Association, even as China experienced its increase (jumping from 113.4 million metric tons to 125.4 million), steel output in the rest of the world declined from nearly 133 million metric tons in the first two months of 2012 to just 127.6 million metric tons in 2013.

A summary of February output sent by the World Steel Association in late March noted, “Turkey’s crude steel production for February 2013 was 2.7 million metric tons, a decrease of 3.9 percent compared to February 2012.

As well, “The U.S. produced 6.7 million metric tons of crude steel in February 2013, down by 11.8 percent [compared with] February 2012.”

For scrap recyclers in North America seeking both greater supply and strong regional demand from mills to help lift pricing, that February statistic for domestic steel production unfortunately sent a signal that markets are far from ready to return to full strength.

The author is editor of Recycling Today and can be contacted at btaylor@gie.net.

Back & Forth

Features - Industry Report

Mixed signals have continued to emanate from the 24-hour news cycle, as one seemingly positive economic indicator is followed shortly by a more troubling statistic.

The instant financial news cycle and the way it can be presented has its critics. As economic recovery in most parts of the world, including the United States, occurs with an historically slow rebound, the messenger is sometimes blamed not for having the nerve to bring bad news but for delivering it on such a nonstop basis. The resulting uncertainty can grip even those with a good business plan, preventing them from having the confidence to start a construction project. From the lender’s side of the desk, approving loans in an uncertain climate can be just as vexing.

The first quarter of 2013 has displayed this pattern several times, for instance when a fiscal agreement in Washington, D.C., is soon followed by another looming deadline that inserts itself into the news cycle within a week or two.

For construction contractors, demolition subcontractors and the scrap recyclers who want more demolition scrap flowing into their yards, another year of slow growth in construction activity seems to be underway.

Cliffs and Sequesters
Contractors involved in the construction and repair of highways, bridges and the considerable number of government buildings in the U.S. spent the first quarter of the year watching the Obama administration and Congress wrestle with one fiscal deadline after another.

After lawmakers and the White House struck a deal shortly after New Year’s Day that avoided across-the-board tax increases and federal spending reductions, it was only weeks before a March 2013 “sequester” deadline on discretionary spending was again causing the Obama administration and Congress to take different positions on the merits of looming spending cuts.

As of late February, USA Today reported that the White House Office of Management and Budget had identified 150 places within its $1.04 trillion budget that “spending on domestic programs will be cut 9 percent and defense spending will be cut 13 percent with seven months remaining in fiscal 2013.”

The newspaper also quotes Jason Furman, deputy director of the White House National Economic Council, as saying, “Nationwide, hundreds of thousands of jobs would be lost,” adding, “The bulk of the job loss would be private jobs that are lost because of the reduced economic activity because of the sequester and the impact that would have on the entire economy.”

Estimates from the Congressional Budget Office predict that 750,000 jobs could be lost in 2013 if the spending cuts take place as planned. Contractors hoping to take part in rebuilding after Superstorm Sandy may be among those affected, as the $60.4 billion in emergency aid approved by Congress is “subject to sequestration and will be cut by almost $3 billion,” according to USA Today.

A Green Chute

Building owners, architects, engineers, contractors and subcontractors are likely to continue to be involved in projects striving to attain green building certification in 2013, which is good news for recyclers.

“Green building in North America will rebound strongly in 2013, in terms of LEED (Leadership in Energy and Environmental Design) project registration,” predicts Tucson, Ariz.-based Yudelson Associates, a consultant to the construction industry.

“Even with commercial and governmental projects proceeding at a lower level, there should be faster growth in green retrofits, with surging college and university projects, along with NGO (nongovernmental organization) activity,” the company’s Jerry Yudelson states in a January 2013 news release.

“It looks like a good year ahead for the green building industry,” he continues. “More people are building green each year, with 50,000 LEED projects underway [globally] by the latest counts; there is nothing on the horizon that will stop this megatrend or its constituent elements.”

Green building renovation and repurposing has grown the fastest, says Yudelson. “The fastest growing LEED rating system the past three years has been LEED for Existing Buildings Operations and Maintenance (LEED O+M), with cumulative floor area in these certified projects now greater than in new construction.”

In the midst of fiscal cliffs and sequesters, construction industry forecasters nonetheless tried to predict how things will play out in the sector for 2013.

In its annual forecast released in mid-January, the Associated General Contractors (AGC), Arlington, Va., states, “Significantly more construction firms are planning to add new staff than plan to cut staff, while demand for many types of private sector construction projects should increase this year, according to survey results.”

The AGC titled the report accompanying its survey results “Tentative Signs of a Recovery: The 2013 Construction Industry Hiring and Business Outlook.”

“While the outlook for the construction industry appears to be heading in the right direction for 2013, many firms are still grappling with significant economic headwinds,” says Stephen E. Sandherr, the association’s CEO. “With luck and a lot of work, the hard-hit construction industry should be larger, healthier, more technologically savvy and more profitable by the end of 2013 than it is today.”

Contractors appear increasingly optimistic that demand for certain private sector projects will expand this year, according to Sandherr. Firms are most optimistic about the outlook for hospital and higher education construction, he adds. Contractors also signaled optimism about the markets for power construction. On the other hand, they had lower expectations for manufacturing, private office and retail, warehouse and hotel construction. Contractors also anticipate that demand for many types of public construction will decline in 2013.

“A significant—but smaller than last year—number of contractors report that customers’ projects have been delayed or cancelled because of tight credit conditions,” the AGC report summary also states, noting that 40 percent of responding firms report that tighter lending conditions have forced their customers to delay or cancel construction projects.

“Unfortunately, there are almost as many causes for concern as there are signs of optimism,” says Ken Simonson, the association’s chief economist.

Disruption Deficit Needed
Avoiding the fiscal cliff provided a basis for the Portland Cement Association (PCA), Skokie, Ill., to increase its forecast for construction activity in the United States in 2013.

“PCA has upwardly revised its projections for the economy, construction activity and cement consumption for 2013,” the trade group announced on its website in January. “The upward revisions reflect adjustments made to our forecast in light of the recent fiscal cliff accord. According to this scenario, the near-term disruptive economic aspects associated with the fiscal cliff are significantly reduced. According to PCA’s new assessment, cement consumption is expected to grow at rates consistent with 2012 levels—perhaps stronger.”

In a Jan. 18 news release expanding on the forecast of its Chief Economist Ed Sullivan, the PCA says, “Improving underlying economic fundamentals, the existence of large pent-up demand balances and the diminishment of economic fiscal cliff uncertainty will combine to result in strong growth rates in 2013 and an increase in cement consumption.”

The revised forecast from the PCA predicts an 8.1 percent growth in cement consumption in 2013, significantly higher than the tepid growth projected in its fall 2012 report. The upward revisions, which imply a similar boost in concrete production, reflect “adjustments made in light of the fiscal cliff accord, recognition of stronger economic momentum and markedly more optimistic assessments regarding residential construction activity,” the PCA says.

The January report also referred to 2012 cement consumption in the U.S. at 78.5 million metric tons, up 8.9 percent compared with 2011.

“Growth in 2013 cement consumption will be largely driven by gains in residential construction,” says Sullivan. “Housing starts should reach nearly 950,000 units, with single-family construction near 700,000 starts during 2013. We see starts hitting the 1 million mark in 2014 or 2015.”

But the party is not quite ready to start, Sullivan cautions, adding that the first quarter of 2013 would actually show declines compared with the same period in 2012. “It is important to point out that this potential decline in first quarter growth rates does not signal a weakening in market fundamentals but rather a hangover from favorable 2012 weather conditions. Stronger gains in cement consumption growth are expected during the second quarter.”

The AGC is hopeful that this activity will increase employment in the construction sector as well. AGC says its survey results “provide a generally optimistic outlook for the year even as firms worry about rising costs and declining public sector demand for construction.”

Sandherr says 31 percent of the firms surveyed plan to add staff in 2013, while only 9 percent plan to lay off employees. Among the 30 states with large enough survey sample sizes, 56 percent of firms in Maryland plan to hire new staff this year, more than in any other state. Only 14 percent of firms in South Carolina plan to add staff this year, the least amount in any state.

Uneasy on the Home Front
The residential construction market is emblematic of the on-again, off-again nature of the economic recovery. Although the sector enjoyed a small winning streak of several months of improvement in 2012, the gains were sometimes minor, and in January 2013 a decline in housing starts broke that streak.

February figures, however, revealed another increase in housing starts, with building permit volumes rising by 4.6 percent and single-family home starts rebounding with a 0.5 percent gain during that month.

In 2013, it appears contractors involved in this sector will again see modest improvements in activity at best.

Data collected and distributed by the U.S. Bureau of the Census show the number of new housing starts falling 8.5 percent in January 2013 compared with the month before. “It is the first major read on the state of the housing market in 2013, and, at first glance at least, it isn’t a very happy one,” reports the Washington Post as of late February.

In an analysis of the data, Neil Irwin of the Post says the news may not be as bad as it appears based on that one statistic. Winter weather in January may have kept the housing starts figure down, but a look at housing permits shows a rebound may yet be underway.

“The number of permits issued for new home construction actually rose in January by 1.8 percent to a 925,000 annual rate. That was stronger than the 1 percent gain analysts had forecast,” writes Irwin.

He also says December 2012’s housing starts number was such a big rise—“a revised 15.7 percent bump, even stronger than the 12.1 percent gain first reported”—that if one averages December and January to arrive at a 931,500 annual rate, this still indicates an upward trend from the 865,000 monthly average for October-November 2012.

The National Association of Homebuilders (NAHB), Washington, D.C., likewise points to positive trends in the face of the one worrying statistic. “In January 2013, single-family housing starts were virtually unchanged from an improved pace in the previous month, registering a 0.8 percent gain to 613,000 units,” the group declared in a late February news release. “This was the strongest pace of single-family housing production since July 2008. Meanwhile, multifamily housing starts, which tend to display significant month-to-month volatility, declined 24.1 percent to 277,000 units.”

“Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multi-family units,” said NAHB Chief Economist David Crowe. “Meanwhile, the decline in multi-family starts reflects an adjustment from an unsustainably large gain in December and is consistent with the up-and-down swings that are often associated with that sector.”

Up-and-down swings, it seems likely, will continue to be part of the demolition and construction landscape in 2013. Scrap recyclers may see modest increases in demolition scrap but probably should not expect a record harvest.

The author is editor of Recycling Today and can be contacted at btaylor@gie.net.

Nearly 400 recycling industry professionals who gathered for back-to-back conferences in Dubai in March heard firsthand accounts of opportunities and challenges inherent in the Middle East region.

March 3-7, the 2013 Paper & Plastics Recycling Conference Middle East and the Middle East Metals Recycling Conference were held at the Hyatt Regency Dubai.

Both events were organized and co-hosted by the Recycling Today Media Group and Waste & Recycling Middle East magazine. They also were supported by corporations and industry associations in the region, including the Bureau of Middle East Recyclers (BMR), Sharif Metals Group, WARAQ Arab Paper Manufacturing Co., Gemini Corp., the Lucky Group, AnM Group, America Chung Nam, The Environment Exchange and WASCO (Waste Collection & Recycling Co. Ltd.).

The conferences yielded a bounty of information and considerable opportunities for attendees to strengthen existing trading relationships and create new ones.

Demonstrating Resilience
The word “emerging” is not often attached to the paper industry in the developed world, but delegates at the 2013 Paper & Plastics Recycling Conference Middle East learned there are still paper-related growth opportunities in that part of the world.

At the “Resilient Fibre” plenary session, moderator Atul Kaul, director of pulp and paper at WARAQ Arab Paper Manufacturing Co., based in Saudi Arabia, said the region’s recycling rate was only 30 percent.

Nonetheless, Ellis said Saudi Paper has collected some 450,000 metric tons of recovered fiber, including 200,000 tons of old corrugated containers (OCC), 150,000 tons of office paper and 100,000 tons of old newspapers (ONP).

The tissue products manufacturer is engaging in increasing its annual production capacity from 125,000 tons per year to 185,000 tons, Ellis said.

Obeikan Paper Industries Co., a packaging paper manufacturing firm based in Saudi Arabia, is expanding and will soon produce 250,000 tons per year of duplex board at its mill in Riyadh, the company’s Mohammed Ahmed Al-Mowkley said.

Both Ellis and Al-Mowkley noted that fiber generated within the Middle East can contain significant amounts of sand and dust. While this harms yield, Al-Mowkley said “technology selection” at the screening and pulping stage can render this scrap paper usable.

Technology selection also can “maximize our flexibility,” said Al-Mowkley, meaning Obeikan can use brown grades, white grades or mixed paper as feedstock.

PK Mukundan of the Indian Agro & Recycled Paper Mills Association, said his Delhi-based organization represents “75 percent of Indian paper production.”

He said the Indian paper industry consists of some 850 paper mills consuming some 12.5 million metric tons per year of recovered fiber. Currently, recycled-content market share is 49 percent of India’s paper production, up from 30 percent in 2000, according to Mukundan.

Strong Ferrous Future
Turkey enjoys a reputation as the world’s largest importer of ferrous scrap, but the nation’s steelmakers are likely to face competition for the secondary commodity.

At the session on ferrous scrap at the Middle East Metals Recycling Conference, Serhat Babac of Turkey-based information company SteelOrbis said the nation’s steel mills, which provide the beams and shapes that form the spine of a major building boom in the Persian Gulf region, make up the largest single import market for ferrous scrap leaving other nations. Speaking at the conference session “Steel’s Sustainable Future,” Babac said mills in Turkey likely will continue to need scrap from North America in 2013. In part, scrap sent from North America is making up for the diminishing amounts leaving the former Soviet Union (where scrap exports are tightly controlled) and the European Union, whose economy is generating scrap at even lower levels than North America’s.

Babac reported that as likely, especially since SteelOrbis foresees that the Black Sea region “will decline even more” as a scrap source, owing to a combination of a depleted scrap reservoir and export tariffs that will tighten supplies from Russia and its neighbors.

Presenter Scott Newell of The Shredder Co. LLC, Canutillo, Texas, noted that 30 auto shredders now are installed in China and predicted that in a few years the number of shredders there will reach 100.

The shredder increase, he noted, is indicative of a larger stream of end-of-life cars and appliances that not only will produce ferrous scrap but also additional nonferrous flows.

Newell also provided results of a test The Shredder Co. was part of at an electric arc furnace (EAF) steel mill in Ecuador. Results from that test found that by using 80 percent ferrous shred, the mill was able to reduce its “tap-to-tap” production time from 67 minutes to 40 minutes.

This gain in production speed turned the mill from a 14,000-tons-per-month mill into a 26,000-tons-per-month mill while also decreasing power usage at the EAF mill. “The use of shredded scrap has saved $35 to $40 per ton in power, electrodes and [melting] additives,” says Newell.

Newell predicted that results like these will help convince some steelmakers that the EAF process fed with ferrous shred is a viable way to compete in the future.

The author is editor of Recycling Today and can be contacted at btaylor@gie.net.

Greater Awareness

Departments - Editor's Column

People attached to municipal curbside recycling programs often use the word “awareness” to describe the process of making sure people know what they can recycle and how they can recycle it.

To a healthy extent, the past 20 years have witnessed significant growth in awareness by this definition. In communities throughout the United States—and indeed the world—people tend to know the core postconsumer recyclables and have been willing to place these materials in their recycling containers.

Readers of this publication are likely to be keenly aware of what is involved in preparing these materials for melting, pulping or pelletizing. Beyond those in Recycling Today’s audience, however, these industrial processes are largely unknown.

Recycling advocates have succeeded in part by creating educational programs for schools. U.S. grade school students are likely to learn at a young age that aluminum and steel cans, newspapers and plastics bottles are candidates for the recycling bin.

A new curriculum is being introduced that will provide some very important follow-up lessons to these existing materials.

Volunteers from several groups, including members of the Institute of Scrap Recycling Industries Inc. (ISRI), are spearheading the JASON Project, designed “to develop a secondary school curriculum to help teachers and students understand both the importance of recycling and the recycling industry.” (The volunteers involved in this project include Recycling Today Media Group Publisher James R. Keefe.)

The intention is for ISRI and its JASON Project allies to build on these initial efforts. “The campaign includes branded, standards-based K-12 curricular experiences; interactive Web-based experiences to enhance student engagement; classroom posters featuring ISRI’s key educational messages; a leveraged national distribution network; strategies for school visits to ISRI facilities; age-appropriate lessons for grades K-4, 5-8 and 9-12; for each grade band, a two- to four-page classroom lesson based on life cycle for each commodity; and much, much more,” according to the ISRI website.

Ideally, young people with knowledge of how recycling ties in to almost anything they discard or buy means they will have a much greater understanding of why a scrap yard or material recovery facility (MRF) is not a waste facility but rather a resource-protecting, job-creating manufacturing plant.